IDEAS home Printed from https://ideas.repec.org/a/cup/jechis/v57y1997i04p859-878_01.html
   My bibliography  Save this article

The Check Tax: Fiscal Folly and the Great Monetary Contraction

Author

Listed:
  • Lastrapes, William D.
  • Selgin, Grorge

Abstract

Although its role has been overlooked by monetary historians, a two-cent tax on bank checks effective from June 1932 through December 1934 appears to have been an important contributing factor to that period's severe monetary contraction. According to the estimates in this article, the currency–demand deposit ratio was about 15 percent higher, and the M1 money stock about 12 percent smaller, ceteris paribus, than each would have been without the tax. The contractionary consequences had in fact been anticipated by many legislators who were, nevertheless, unable to prevent the measure from being included in the Revenue Act of 1932.

Suggested Citation

  • Lastrapes, William D. & Selgin, Grorge, 1997. "The Check Tax: Fiscal Folly and the Great Monetary Contraction," The Journal of Economic History, Cambridge University Press, vol. 57(4), pages 859-878, December.
  • Handle: RePEc:cup:jechis:v:57:y:1997:i:04:p:859-878_01
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S0022050700019562/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pedro Albuquerque, 2006. "BAD taxation: Disintermediation and illiquidity in a bank account debits tax model," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 13(5), pages 601-624, September.
    2. Felipe Restrepo & Lina Cardona‐Sosa & Philip E. Strahan, 2019. "Funding Liquidity without Banks: Evidence from a Shock to the Cost of Very Short‐Term Debt," Journal of Finance, American Finance Association, vol. 74(6), pages 2875-2914, December.
    3. Restrepo, Felipe, 2019. "The effects of taxing bank transactions on bank credit and industrial growth: Evidence from Latin America," Journal of International Money and Finance, Elsevier, vol. 93(C), pages 335-355.
    4. García-Palacios, Jaime H. & Hasman, Augusto & Samartín, Margarita, 2014. "Banking crises and government intervention," Journal of Financial Stability, Elsevier, vol. 15(C), pages 32-42.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cup:jechis:v:57:y:1997:i:04:p:859-878_01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/jeh .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.